Russia’s invasion in Ukraine and the war that continues today as a consequence was the inciting event for some of the largest economic actions taken against Russia, or any country, in years. Although some eastern countries continue to support Russia, many countries of the West have banded together against Russia.
These sanctions against Russia present themselves in a few different ways, the main idea being a reduction of Russia’s international trading power. This comes in the form of removing Russia from SWIFT, an international banking system in over 200 countries. It also comes in the form of freezing foreign Russian reserves, reducing importation of Russian exports, and reducing exports to Russia.
On top of this many individual companies have completely suspended operations in Russia. This ranges from massive companies like Google and Disney to companies that have large financial impacts like Visa and Mastercard.
These collective efforts are projected to contract Russia’s economy by 15% in 2022. This is a major economic downturn and an effective use of sanctions against a nation. Russia has in response converted almost all USD into the native ruble, increased interest rates, and implemented various other actions to stabilize their economy.
Although these efforts have been effective in stabilizing Russia for the moment, it’s yet to be seen how the sanctions will continue to affect Russia as time passes, especially as countries like the U.K only plan to remove Russia more and more from their oil trade. The fact that Ukraine is holding up so well does not pair well for Russia.